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As a web developer/designer who works with a lot of small start up businesses, The most popular question I get asked is “How can I take credit card payments?”

The time and expense of setting up a merchant account with your bank so that they can lease you a credit card machine while also charging you per each and every transaction..can be daunting, frustrating and expensive!

Paypal now has a virtual terminal that you can use if you are a Paypal member. However the virtual terminal requires you to ‘apply’ to this service and you may get turned down based on your credit rating. You also still need to be sitting at the computer to process the transaction when using Paypal.

There are newer, and what I consider AMAZING, sites/apps you can now utilize to process credit cards. I predict these sites are scaring banks and causing them to lose processing fees hand over fist.

Square is an amazing application that I frankly am SHOCKED I had not heard of before! With Square (www.squreup.com) you can be set up and taking credit card payments (visa, mastercard, amex, discover) in about 10 minutes via your smart phone or iPad (iphone/ipad/Android). NOTE: this is NOT a resolution for processing online payments from your website, Square is only to process credit cards person to person or over the phone.

Setting Up Your Account: Simply navigate on your computer to SquareUp.com and sign up. They will ask you questions regarding your needs (personal or business account etc) and they will need your bank information so that they may batch transactions into your bank account. They do not ask for your full SSN, only the last for numbers along with DOB. They will then ask a few questions to validate your ID..pretty impressive really.. and it’s all done via HTTPS SSL security.

The account is set up literally within minutes and you can instantly start taking credit card payments via the Square application (load to your smart phone or ipad via iTunes or Android Market). The application will allow you to type in the Credit Card information and process the card, but they also will send you a credit card swiper that plugs into your phone headphone jack…for free!

Truth be told, my experience with the swiper is hit and miss. Some cards took numerous swipes to process correctly..but some went right through.

After entering the amount to charge and then swiping the card, the customer can ‘sign’ the transaction with their finger right on your phone! (under settings you can tell the app to not require signature for any transaction under $25.00).

A receipt containing an image of the signature can be sent to the customer via txt or email.
Every evening Square will batch your payments and deposit them into your bank account.

The application is free, the card swiper is free and Square charges only 2.75% (similar to Paypal) from every transaction for the convenience of instantly accepting credit card payments for your business! You can also have numerous users all logged into the same account with their phones processing payments (like in the case of a sales expo or a small shop with numerous sales clerks).

Other features from Square via the phone App:

Log Sales History

Accept/log cash transactions

Automatically add sales tax

Allow for tips to be added to sale

Multiple users accept payments into the same account

The ONLY thing that would make companies like Square unstoppable is if they offered an API to allow you to process credit cards through your website…I have to think that is in the near future.